Renovo (RNVO) 10QSB 2006 Q1 Quarterly report (small business)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-QSB

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2006

[ ] TRANSITION REPORT UNDER SECTION 13 OR

15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-49634

RENOVO HOLDINGS

(Exact name of small business issuer as specified in its charter)

Nevada	88-0475756
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

100 Candace Drive

Suite 100

Maitland, Florida 32751

(Address of principal executive offices)

(407) 599-2886

(Issuer’s telephone number)

Copies of Communications to:

Stoecklein Law Group

402 West Broadway, Suite 400

San Diego, CA 92101

(619) 595-4882

Fax (619) 595-4883

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes      X      No ____

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes      X      No                  

The number of shares of Common Stock, $0.001 par value, outstanding on May 22, 2006, was 485,479,216 shares.

Transitional Small Business Disclosure Format (check one):

Yes               No        X        

PART 1 – FINANCIAL INFORMATION

JASPERS + HALL, PC

CERTIFIED PUBLIC ACCOUNTANTS

9175 Kenyon Avenue, Suite 100

Denver, CO 80237

303-796-0099

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors

Renovo Holdings

We have reviewed the accompanying balance sheet of Renovo Holdings, a Development Stage Company, as of March 31, 2006 and the related statements of operations and cash flows for the three-months then ended. These financial statements are the responsibility of the Company’s management.

We conducted our reviews in accordance with standards established by the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements for them to be in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 6, conditions exist which raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Jaspers + Hall, PC

Jaspers + Hall, PC

Denver, Colorado

May 22, 2006

1

Item 1. Financial Statements

RENOVO HOLDINGS

(A Development Stage Company)

BALANCE SHEETS

(Unaudited)

		March 31,		December 31,
	2006		2005
ASSETS
Current assets:
Cash	$	2,537	$	2,867
Total current assets		2,537		2,867
Equipment, net of accumulated depreciation		14,822		16,696
Total Assets	$	17,359	$	19,563
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Payroll taxes payable	$	24,111	$	24,111
Accrued interest payable		20,396		17,488
Accrued auto allowance		22,400		20,300
Accrued reimbursement to officer		6,861		3,861
Accrued salary - officer		491,666		429,167
Secured convertible debenture		220,000		220,000
Total current liabilities		785,434		714,927
Stockholders' deficit:
Preferred stock, $.001 par value authorized 5,000,000; no		-		-
shares issued and outstanding as of 3/31/06 and 12/31/05
Common stock, $.001 par value, authorized 500,000,000
shares; 485,479,216 issued and outstanding
as of 3/31/06 and 12/31/05 respectively		485,479		485,479
Additional paid-in capital		697,981		697,981
Deficit accumulated during development stage		(1,951,535)		(1,878,824)
Total stockholders' deficit		(768,075)		(695,364)
Total liabilities and stockholders' deficit	$	17,359	$	19,563

See accountant review report and notes to these financial statements.

2 

RENOVO HOLDINGS

(A Development Stage Company)

STATEMENTS OF OPERATIONS

(unaudited)

							For the Period October 18, 2000 (Inception) to March 31, 2006
			Three Months Ended March, 31
			2006		2005
Revenue		$	-	$	-	$	-
Expenses:
	Loss on sale of property		-		-		5,556
	General and Administrative		330		236,025		324,733
	Depreciation		1,874		5,870		22,554
	Advertising		-		247,150		286,900
	Consulting		-		312,200		411,500
	Officer salary		62,499		250,000		666,667
	Legal and accounting		3,000		31,710		100,302
	Auto Allowance		2,100		8,400		22,400
	Interest expense		2,908		7,958		24,652
	Other services - related party		-		-		72,500
	Other expense		-		-		13,771
	Total expenses		72,711		1,099,313		1,951,535
Net loss		$	(72,711)	$	(1,099,313)	$	(1,951,535)
	Weighted average number of common
	shares outstanding, basic and fully diluted		338,823,292		178,158,333
	Net loss per weighted share
	basic and fully diluted	$	(0.00)	$	(0.01)

See accountant review report and notes to these financial statements.

3

RENOVO HOLDINGS

(A Development Stage Company)

STATEMENTS OF CASH FLOWS

(unaudited)

					For the Period October 18, 2000 (Inception) to March 31, 2006
		Three Months Ended March 31,
		2006		2005
CASH FLOWS FROM OPERATIONS
Net loss	$	(72,711)	$	(174,180)	$	(1,951,535)
Adjustments to reconcile net loss to net cash
used for operating activities:
Stock issued for services		-		4,306		446,842
Stock issued in lieu of debt		-		-		120,000
Loss on sale of equipment		-		-		5,556
Donated services		-		-		13,230
Depreciation		1,874		3,850		22,553
Increase(decrease) in accounts payable		-		(2,516)		-
Increase in accrued auto allowance		2,100		2,100		22,400
Increase in accrued expenses		2,908		7,152		48,368
Increase in accrued salary -officer		62,499		37,500		471,666
Increase in loan from officer		3,000		-		3,000
Net cash used for operating activities		(330)		(121,788)		(797,920)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of equipment		-		(1,254)		(62,931)
Proceeds from sale of equipment		-		-		20,000
Net cash used in investing activities		-		(1,254)		(42,931)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock		-		47,000		543,388
Issuance of secured debenture		-		100,000		300,000
Net cash used in financing activities		-		147,000		843,388
Net increase (decrease) in cash		(330)		23,958		2,537
Cash, beginning of period		2,867		16,075		-
Cash, end of period	$	2,537	$	40,033	$	2,537
Supplemental disclosure
Interest paid	$	-	$	1,359	$	1,359
Taxes paid	$	-	$	-	$	-

See accountant review report and notes to these financial statements.

4

RENOVO HOLDINGS

(a Development Stage Company)

Notes to Financial Statements

Note 1 – Organization and summary of significant accounting principles

Organization

The Company was organized October 18, 2000 (Date of Inception) under the laws of the State of Nevada, as First Impressions. The Company has not commenced significant operations and, in accordance with Statement of Financial Accounting Standards No. 7 Accounting and Reporting by Development Stage Enterprises (“SFAS No. 7”), the Company is considered a development stage company.

On July 14, 2003, we amended our Articles of Incorporation changing our name from First Impressions to Fortis Enterprises. The Board of Directors determined that the name, "First Impressions" was limiting the Company's ability to pursue the expansion of our business into other marketing arenas and felt that the name Fortis Enterprises was more generic and allows for more flexibility in the future expansion of business opportunities. We also increased the total amount of authorized common stock from 50,000,000 shares to 100,000,000 shares.

On June 11, 2004, we amended our Articles of Incorporation changing our name from Fortis Enterprises to Renovo Holdings. We also increase the total mount of authorized common stock from 100,000,000 to 500,000,000 shares.

Accounting period

The Company has adopted an annual accounting period of January through December.

Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ significantly from those estimates.

Cash and cash equivalents

For the purpose of the statements of cash flows, all highly liquid investments with a maturity of three months or less are considered to be cash equivalents.

Revenue recognition

Sales and related cost of sales are generally recognized upon shipment of products. Cost of goods sold generally represents the cost of items sold and the related shipping and selling expenses.

Furniture and equipment - Furniture and equipment are stated at cost less accumulated depreciation. It is the policy of the Company to capitalize items greater than or equal to $1,000 and provide depreciation based on the estimated useful life of individual assets, calculated using the straight line method.

5

RENOVO HOLDINGS

(a Development Stage Company)

Notes to Financial Statements

Estimated useful lives range as follows:

	Years
Furniture and equipment	3 – 5
Computer hardware	3
Vehicles	5

Advertising Costs

The Company expenses all costs of advertising as incurred. There were no advertising costs included in general and administrative expenses as of March 31, 2006.

Fair value of financial instruments

Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2006. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, accounts payable and notes payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.

Impairment of long lived assets

Long lived assets held and used by the Company are reviewed for possible impairment whenever events or circumstances indicate the carrying amount of an asset may not be recoverable or is impaired. No such impairments have been identified by management at March 31, 2006 or March 31, 2005.

Earnings per share

The Company has adopted Statement of Financial Accounting Standards No. 128. Earnings Per Share ("SFAS No. 128"). Basic earnings per common share ("EPS") calculations are determined by dividing net income by the weighted average number of shares of common stock outstanding during the year. Diluted earning per common share calculations are determined by dividing net income by the weighted average number of common shares and dilutive common share equivalents outstanding. During periods when common stock equivalents, if any, are anti- dilutive they are not considered in the computation.

Segment reporting

The Company has adopted Statement of Financial Accounting Standards No. 130, Disclosures About Segments of an Enterprise and Related Information. The Company operates as a single segment and will evaluate additional segment disclosure requirements as it expands its operations.

Income taxes

The Company has adopted Statement of Financial Accounting Standard No. 109, Accounting for Income Taxes ("SFAS No. 109") for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between

6

RENOVO HOLDINGS

(a Development Stage Company)

Notes to Financial Statements

the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes because of differences in amounts deductible for tax purposes. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

Note 2 – Furniture and Equipment

Furniture and equipment consists of the following categories at March 31, 2006 and 2005:

	2006	2005
Computers	17,739	19,880
Office equipment	6,508	15,161
Vehicles	-	27,362
Software	527	527
	24,774	62,930
Less accumulated depreciation	(9,952)	(9,720)
Total	14,822	53,210

Depreciation expense for the three months ended March 31, 2006 and 2005 totaled $1,875 and $3,850, respectively.

Note 3 – Secured convertible debentures

During 2004, the Company issued secured convertible debentures totaling $300,000 to a securities broker. These debentures mature in April 2007 and include interest of 5% payable upon conversion or maturity.

The holder has the option to convert, at any time, all or part of the principal amount of the debenture, plus accrued interest, into shares of the Company’s common stock at a conversion price equal to the lesser of (a) 120% of the closing bid price of the common stock or (b) 80% of the lowest closing bid price of the Company’s common stock for the five trading days immediately preceding the conversion date. During 2005 and 2004, $20,000 and $60,000 of these debentures were converted to 21,637,426 and 13,988,094 shares of common stock, respectively.

7

RENOVO HOLDINGS

(a Development Stage Company)

Notes to Financial Statements

The Company may redeem a portion or all of these debentures with 15 days notice for 120% of the amount redeemed, plus accrued interest.

Note 4 – Income taxes

Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse.

The Company currently has net operating loss carryforwards aggregating approximately $1,500,000, which expire through 2025. The deferred tax asset of approximately $500,000 related to this carryforward has been fully reserved.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences for the periods presented are as follows:

Income tax provision at the
	federal statutory rate	34%
Effect of operating losses		-34%
		0%

Net deferred tax assets consist of the following:

		For the three months ended
		31-Mar
		2006	2005
Gross deferred tax asset		$ 625,000	$ 475,000
Gross deferred tax liability		-	-
Valuation allowance		(625,000)	(475,000)
	Net deferred tax asset	$ -	$ -

The Company did not pay any income taxes during the three months ended March 31, 2006 or 2005.

Note 5 – Stockholders’ equity

The Company is authorized to issue 5,000,000 shares of preferred stock with a par value of $0.001. Rights, preferences and other terms of the preferred stock will be determined by the board of directors at the time of issuance.

8

RENOVO HOLDINGS

(a Development Stage Company)

Notes to Financial Statements

During the six-month period ended December 31, 2004, the Company issued 82,300,000 shares of its $0.01 par value common stock to an escrow agent on behalf of Cornell Capital pursuant to the Standby Equity Distribution Agreement entered into on June 30, 2004. The Company recorded a subscription receivable as of December 31, 2004 in the amount of $47,000. The Company received $47,000 in payment of the subscription receivable in 2005.

During the year ended December 31, 2005, the Company issued 83,758,696 shares of its $0.01 par value common stock to an escrow agent on behalf of Cornell Capital pursuant to the Standby Equity Distribution Agreement entered into on June 30, 2004. The Company received $79,500 in payment of the subscription receivable in 2005.

In February 2005, the Company converted $20,000 of the secured convertible debenture in exchange for 21,637,426 shares of its $0.001 par value common stock.

On August 17, 2005, the Company issued 200,000,000 shares of its par value common stock to a its sole officer in exchange for accrued salaries valued at $120,000.

There have been no other issuances of common stock.

During 2004, the Company entered into a Standby Equity Distribution Agreement with Cornell Capital Partners (“Cornell”) in order to fund development efforts. This agreement calls for Cornell to purchase up to $5,000,000 of the Company’s common stock at a price based upon recent market activity. Purchases of stock are initiated by the Company as funds are needed in accordance with the agreement.

Note 6 – Going concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. As noted above, the Company is in the development stage and, accordingly, has not yet generated revenues from operations. Since its inception, the Company has been engaged substantially in financing activities and developing its product line, setting up its e-commerce website, and incurring substantial costs and expenses. As a result, the Company incurred accumulated net losses from October 17, 2000 (inception) through the period ended March 31, 2006 in excess of $1,900,000. In addition, the Company's development activities since inception have been financially sustained through equity financing.

The ability of the Company to continue as a going concern is dependent upon its ability to raise additional capital from the sale of common stock and, ultimately, the achievement of significant operating revenues. The accompanying financial statements do not include any adjustments that might be required should the Company be unable to recover the value of its assets or satisfy its liabilities.

In order to fund development, management has entered into a Standby Equity Distribution Agreement with Cornell Capital as described in Note 5.

9

RENOVO HOLDINGS

(a Development Stage Company)

Notes to Financial Statements

Note 7 – Warrants and options

There are no warrants or options outstanding to acquire any additional shares of common stock.

Note 8 – Related party transactions

Amounts due to the Company’s chief executive officer totaled approximately $521,000 and $398,000 at March 31, 2006 and 2005, respectively. These amounts primarily represent unpaid salary and auto allowance in accordance with an employment agreement.

Note 9 – Commitments and contingent liabilities

Lease commitments - The Company leases certain office premises under a non-cancelable operating leases. The leases expire in October 2006 and requires the Company to pay real estate taxes, insurance and other costs.

Aggregate minimum rental commitments at March 31, 2006 under non-cancelable operating leases are summarized as follows:

Quarter ending	Gross
March 31,	Rentals
2006	$ 40,026
	$ 40,026

Rental expense included in operations totaled approximately $0 and $15,000 for the three months ended March 31, 2006 and 2005, respectively.

Legal matters - The Company is occasionally party to litigation or threat of litigation arising in the normal course of business. Management, after consultation with legal counsel, does not believe that the resolution of any such matters will have a material effect on the Company’s financial position or results of operations.

Employment agreement - The Company has entered into an employment agreement with its chief executive officer. This agreement establishes bonuses based upon new mergers, acquisitions or business unit start-ups the executive brings to the Company.

Note 10 – Stock-based compensation

During 2004, the Company adopted a consultant and employee stock compensation plan whereby they may issue up to 15,625,000 shares of common stock at the discretion of the board of directors. The purpose of the plan is to further the growth of the Company by awarding common stock for services provided.

During the three months ended March 31, 2005, the Company granted shares to employees, vendors and others as disclosed in the accompanying statement of changes in stockholders’ equity. Shares granted as compensation to non-employees are recorded at the fair value of the services provided since that provides a more objective source of

10

RENOVO HOLDINGS

(a Development Stage Company)

Notes to Financial Statements

information. Expenses included in the accompanying financial statements related to stock-based compensation totaled approximately $22,500 during the three months ended March 31, 2005.

Note 11 – Subsequent Events

On April 1, 2006, the Company entered into a Note Payable with Stephen W. Carnes, President of the Company, for the principal amount of $6,220.71. Pursuant to the note the Company promised to pay to the order of Mr. Carnes the sum of $6,220.71 of paid expenses and loans by Mr. Carnes on behalf of the Company that have accrued up to April 1, 2006. The note shall be paid in full on or before July 15, 2006. Any delay of payment beyond July 15, 2006 shall result in interest beginning to accrue at a rate of 12% interest beginning July 15, 2006.

On April 12, 2006, the Company entered into another Note Payable with Mr. Carnes for the principal amount of $510.60. Pursuant to the note the Company promised to pay to the order of Mr. Carnes the sum of $510.60 of paid expenses by Mr. Carnes on behalf of the Company that have accrued up to April 12, 2006. The note shall be paid in full on or before July 15, 2006. Any delay of payment beyond July 15, 2006 shall result in interest beginning to accrue at a rate of 12% interest beginning July 15, 2006.

11

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement.

Although we believe that the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

• increases in interest rates or our cost of borrowing or a default under any material debt agreements;

• the unavailability of funds for capital expenditures;

• our ability to complete the merger with ei3 Corporation; and

• the ability to locate other merger or acquisition candidates if the merger with ei3 does not close.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Factors That May Affect Our Plan of Operation” in this document and in our Annual Report on Form 10-KSB for the year ended December 31, 2005.

Item 2. Plan of Operation

Overview

Renovo Holdings is a Development Stage Company that intended to capitalize upon the niche market opportunities within the commercial and residential restoration service markets. We were incorporated in the State of Nevada on October 18, 2000 under the name First Impressions.

12

We have continuously incurred losses since inception. For the quarter ended March 31, 2006 we had a net loss of $72,711 as compared to a net loss of $1,099,313 for the quarter ended March 31, 2005.

Plan of Operation

Our original plan of operation has been to focus our efforts on positioning Renovo to provide complete loss management and restoration services to residential, commercial, industrial, and institutional properties. Initially, we were seeking to establish Renovo in the Florida market, with the ability to expedite the recovery process, with the eventual capability of responding to loss and restoration across the United States. However, as a result of our lack of revenue generation, we have not been satisfied with our business plan or original plan of operation. Therefore, we re-assessed our business plan, and aggressively sought out other business opportunities in an effort to substantiate stockholder value.

On September 26, 2005, Renovo and our sole officer, director and principal stockholder, Stephen W. Carnes, entered into an Agreement and Plan of Merger (the "Merger Agreement") with ei3 Corporation, a Delaware corporation (“ei3”). Pursuant to the terms of the Merger Agreement, we will reincorporate in Delaware and then merge (the "Merger") with ei3, with Renovo as the surviving corporation of Merger. We will change our name to ei3 Corporation and will cease to be a shell company. The merger is intended to be structured as a tax-free reorganization accounted for as a purchase whereby ei3 will be merged with and into Renovo wherein the separate corporate existence of ei3 shall cease to exist. As a result of the Merger, the stockholders of ei3 will receive shares of our common stock representing approximately 93% of our outstanding shares of common stock after the Merger.

A copy of the Merger Agreement is filed as Exhibit 2.1 to Form 8-K filed on September 29, 2005. 

The following description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the filed Merger Agreement.

On the terms and subject to the conditions of the Merger Agreement, at the effective time and as a result of the Merger, each share of ei3’s common stock issued and outstanding immediately prior to the effective time of the Merger will be automatically converted into the right to receive four (4) shares of our common stock. As of the closing date of the Merger, the aggregate number of our shares to be issued to the ei3 stockholders shall equal approximately 93% of our outstanding shares of common stock. Our shares of common stock issued in the Merger will not be registered under the Securities Act of 1933, as amended and will therefore be deemed "restricted securities".

Consummation of the Merger is subject to the satisfaction of various conditions, including (i) approval of the Merger Agreement and the Merger by Renovo and ei3’s stockholders, (ii) approval by our stockholders to reincorporate (change of domicile)

13

Renovo in the State of Delaware; (iii) approval by our stockholders of a one for 47.84168 reverse stock split, such that we shall have not more than 10,147,620 shares of common stock issued and outstanding; (iv) certain of our notes held by Cornell Capital Partners being amended in form satisfactory to ei3; (v) ei3 shall have consummated a debt or equity financing of at least $1,500,000; and (vi) the accuracy of representations and warranties. The Merger Agreement contains certain termination rights for both ei3 and us.

Further, Stephen W. Carnes, our sole officer, director and principal stockholder will receive $200,000 in cash upon closing of the Merger. In addition, Mr. Carnes has agreed to assume all of our liabilities, excluding the notes held by Cornell Capital Partners, upon closing of the Merger, pursuant to the terms of an Assumption Agreement dated September 26, 2005 between Renovo and Mr. Carnes, a copy of which is filed as Exhibit 10.1 to Form 8-K filed on September 29, 2005.

ABOUT ei3

ei3 is a privately held company which provides its customers the ability to remotely monitor and service their equipment through ei3’s proprietary networking and ASP software. In addition to a remote service platform, ei3 offers customer-driven productivity tools to enhance equipment performance for manufacturers. ei3 also provides network management, software licensing, hosting and technical support services.

If we do not successfully consummate the merger with ei3, we will attempt to locate and negotiate with other business entities for the merger of a target business into the Company. In certain instances, a target business may wish to become a subsidiary of the Company or may wish to contribute assets to the Company rather than merge. No assurances can be given that we will be successful in locating or negotiating with any target business.

Satisfaction of our cash obligation for the next 12 months.

We plan on satisfying our cash obligations over the next twelve months through additional equity and/or third party financing. We do not anticipate generating revenues sufficient enough to satisfy our working capital requirements within the next twelve months.

A critical component of our operating plan impacting our continued existence is the ability to obtain additional capital through additional equity and/or debt financing. We do not anticipate enough positive internal operating cash flow until such time as we complete the acquisition and can generate substantial revenues, which may take the next few years to fully realize, if ever. In the event we cannot obtain the necessary capital to pursue our strategic plan, we may have to cease or significantly curtail our operations. This would materially impact our ability to continue operations.

14

Liquidity and Capital Resources

On April 1, 2006, we entered into a Note Payable with Stephen W. Carnes, President of the Company, for the principal amount of $6,220.71. Pursuant to the note we promised to pay to the order of Mr. Carnes the sum of $6,220.71 of paid expenses and loans by Mr. Carnes on behalf of the Company that have accrued up to April 1, 2006. The note shall be paid in full on or before July 15, 2006. Any delay of payment beyond July 15, 2006 shall result in interest beginning to accrue at a rate of 12% interest beginning July 15, 2006.

On April 12, 2006, we entered into another Note Payable with Mr. Carnes for the principal amount of $510.60. Pursuant to the note we promised to pay to the order of Mr. Carnes the sum of $510.60 of paid expenses by Mr. Carnes on behalf of the Company that have accrued up to April 12, 2006. The note shall be paid in full on or before July 15, 2006. Any delay of payment beyond July 15, 2006 shall result in interest beginning to accrue at a rate of 12% interest beginning July 15, 2006.

Over the next twelve months we believe that existing capital and anticipated funds from operations will not be sufficient to sustain operations and planned expansion. As a result, we will be required to seek additional capital in the future to fund our operations through additional equity or debt financing or credit facilities. No assurance can be made that such financing would be available, and if available it may take either the form of debt or equity. In either case, the financing could have a negative impact on our financial condition and our Stockholders.

We anticipate incurring operating losses over the next twelve months. Our lack of operating history makes predictions of future operating results difficult to ascertain. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks include, but are not limited to, an evolving and unpredictable business model and the management of growth. To address these risks we must, among other things, locate suitable acquisition targets, obtain a customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so can have a material adverse effect on our business prospects, financial condition and results of operations.

Going Concern

The consolidated financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of the Company as a going concern. The Company’s cash position may be inadequate to pay all of the costs associated with its intended business plan. Management intends to use borrowings and security sales to mitigate the effects of its cash position, however no assurance can be given that debt or equity financing, if and when required will be available. The financial statements do not include any adjustments relating to the

15

recoverability and classification of recorded assets and classification of liabilities that might be necessary should the Company be unable to continue existence.

Summary of any product and development that we will perform for the term of the plan.

We do not anticipate performing any significant product research and development under our plan of operation until such time as we complete the acquisition.

Expected purchase or sale of plant and significant equipment.

We do not anticipate the purchase or sale of any plant or significant equipment, as such items are not required by us at this time or anticipated to be needed in the next twelve months.

Significant changes in the number of employees.

As of March 31, 2006, we had 1 employee. We are dependent upon Steve W. Carnes our sole officer and director. We will need to hire full time operational staff as our operations commence and we complete anticipated acquisitions.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

FACTORS THAT MAY AFFECT OUR PLAN OF OPERATION

Renovo has historically lost money and losses may continue in the future, which may cause us to curtail operations.

Since our inception we have not been profitable and have lost money on both a cash and non-cash basis. For the quarters ended March 31, 2006 and March 31, 2005 we incurred net losses of $72,711 and $1,099,313, respectively. Our accumulated deficit at the end of March 31, 2006 was $1,951,535. Future losses are likely to occur, as we are dependent on spending money to pay for our operations. No assurances can be given that we will be successful in reaching or maintaining profitable operations. Accordingly, we may experience liquidity and cash flow problems. If our losses continue, our ability to operate may be severely impacted.

We have not accounted for the withholding of federal or state taxes upon the issuance of common stock for services rendered by our officer, employees and consultants, which may subject us to substantial tax liabilities, including penalties and interest.

In 2005, the Company did not recognize withholding tax liabilities on the

16

issuance of shares of common stock to our sole officer and director. Further, over the past several years we have issued several million dollars worth of stock compensation, to consultants who may be deemed to be employees, without withholding potential federal or state income tax liabilities.

The Company has based its decision not to withhold taxes on the belief such shares of common stock were issued in connection with the performance of services by true consultants and not by employees, and, as such, are not subject to tax withholding requirements. There can be no assurance, however, that the IRS or state taxing authorities will agree with the Company’s position and will not assert that the Company is liable for the failure to withhold income and employment taxes with respect to the issuance of common stock services. If the Company became liable for the failure to withhold taxes on the issuances, the aggregate potential liability, exclusive of any interest or penalties, would have a material impact on the Company and its results of operations.

The Company has not recognized accruals for the potential withholding taxes, penalties and/or interest that may be imposed with respect to the withholding tax issues. If taxing authorities assert such issues and prevail related to these withholding tax issues and other related contingencies, including penalties, the liability that could be imposed by taxing authorities would be substantial.

Renovo may need to raise additional capital or debt funding to sustain operations.

Unless we can become profitable with the existing sources of funds we have available and our operations, we will require additional capital to sustain operations and we may need access to additional capital or additional debt financing to grow our sales. In addition, to the extent that we have a working capital deficit and cannot offset the deficit from profitable sales or the Cornell line of credit we may have to raise capital to repay the deficit and provide more working capital to permit growth in revenues. We cannot be assured that financing, whether from external sources or related parties, will be available if needed or on favorable terms. Our inability to obtain adequate financing will result in the need to reduce the pace of business operations and the search for acquisition candidates. Any of these events could be materially harmful to our business and may result in a lower stock price.

We have been the subject of a going concern opinion for the years ended December 31, 2005 and December 31, 2004 from our independent auditors, which means that we may not be able to continue operations unless we can become profitable or obtain additional funding.

Our independent auditors have added an explanatory paragraph to their audit opinions issued in connection with our financial statements for the years ended December 31, 2005 and December 31, 2004, which states that the financial statements raise substantial doubt as to our ability to continue as a going concern. Our ability to make operations profitable or obtain additional funding will determine our ability to continue as a going concern. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. We expect to be able to continue operations

17

for twelve months with the cash currently on hand, and from additional equity or debt financing.

We are subject to a working capital deficit, which means that our current assets on March 31, 2006 were not sufficient to satisfy our current liabilities and, therefore, our ability to continue operations is at risk.

We had a working capital deficit for the three months ended March 31, 2006 which means that our current liabilities exceeded our current assets on March 31, 2006 by $782,897. Current assets are assets that are expected to be converted to cash within one year and, therefore, may be used to pay current liabilities as they become due. Our working capital deficit means that our current assets on March 31, 2006 were not sufficient to satisfy all of our current liabilities on March 31, 2006. If our ongoing operations do not begin to provide sufficient profitability to offset the working capital deficit, we may have to raise capital or debt to fund the deficit or curtail future operations.

Our common stock may be affected by limited trading volume and may fluctuate significantly, which may affect our stockholders’ ability to sell shares of our common stock.

Prior to this filing, there has been a limited public market for our common stock and there can be no assurance that a more active trading market for our common stock will develop. An absence of an active trading market could adversely affect our stockholders' ability to sell our common stock in short time periods, or possibly at all. Our common stock has experienced, and is likely to experience in the future, significant price and volume fluctuations, which could adversely affect the market price of our common stock without regard to our operating performance. In addition, we believe that factors such as quarterly fluctuations in our financial results and changes in the overall economy or the condition of the financial markets could cause the price of our common stock to fluctuate substantially. These fluctuations may also cause short sellers to enter the market from time to time in the belief that we will have poor results in the future. We cannot predict the actions of market participants and, therefore, can offer no assurances that the market for our stock will be stable or appreciate over time. These factors may negatively impact our stockholders' ability to sell shares of our common stock.

Our common stock is deemed to be a low priced “Penny Stock,” which may make it more difficult for investors to sell their shares due to suitability requirements.

Our common stock is deemed to be a "penny stock" as that term is defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934. These requirements may reduce the potential market for our common stock by reducing the number of potential investors. This may make it more difficult for investors in our common stock to sell shares to third parties or to otherwise dispose of them. This could cause our stock price to decline. Penny stocks are stock:

• With a price of less than $5.00 per share;

18

• That are not traded on a "recognized" national exchange;

• Whose prices are not quoted on the NASDAQ automated quotation system (NASDAQ listed stock must still have a price of not less than $5.00 per share); or

• In issuers with net tangible assets less than $2.0 million (if the issuer has been in continuous operation for at least three years) or $10.0 million (if in continuous operation for less than three years), or with average revenues of less than $6.0 million for the last three years.

Broker/dealers dealing in penny stocks are required to provide potential investors with a document disclosing the risks of penny stocks. Moreover, broker/dealers are required to determine whether an investment in a penny stock is a suitable investment for a prospective investor.

We could fail to attract or retain key personnel, which could be detrimental to our operations.

Our success largely depends on the efforts and abilities of Stephen W. Carnes, our sole Officer and Director. The loss of the services of Mr. Carnes could materially harm our business because of the cost and time necessary to find a successor. Such a loss would also divert management attention away from operational issues. We do not presently maintain key-man life insurance policies on Mr. Carnes. We do not have other key employees who manage our operations. To the extent that we are smaller than our competitors and have fewer resources, we may not be able to attract a sufficient number and quality of staff, when required.

We may acquire assets or other businesses in the future.

We may consider acquisitions of other assets or other business. Any acquisition involves a number of risks that could fail to meet our expectations and adversely affect our profitability. For example:

• The acquired assets or business may not achieve expected results;

• We may incur substantial, unanticipated costs, delays or other operational or financial problems when integrating the acquired assets;

• We may not be able to retain key personnel of an acquired business;

• Our management’s attention may be diverted; or

• Our management may not be able to manage the acquired assets or combined entity effectively or to make acquisitions and grow our business internally at the same time.

If these problems arise we may not realize the expected benefits of an acquisition.

Our limited operating history makes it difficult to forecast our future results.

19

As a result of our limited operating history, our historical financial and operating information is of limited value in predicting our future operating results. We may not accurately forecast customer behavior and recognize or respond to emerging trends, changing preferences or competitive factors facing us, and, therefore, we may fail to make accurate financial forecasts. Our current and future expense levels are based largely on our investment plans and estimates of future revenue. As a result, we may be unable to adjust our spending in a timely manner to compensate for any unexpected revenue shortfall, which could force us to curtail or cause us to terminate our business operations.

As a result of the Merger with ei3, our stockholders, assuming the transaction is completed will be diluted by approximately 93%.

There is no assurance that after the Merger, and upon the substantial dilution that our shares will not substantially decrease in value as a result of the dilution.

Item 3. Controls and Procedures.

We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the specified time periods. As of the end of the period covered by this report, Steven W. Carnes, our Chief Executive Officer and Principal Financial Officer evaluated the effectiveness of our disclosure controls and procedures. Based on the evaluation, which disclosed no significant deficiencies or material weaknesses, Mr. Carnes, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures are effective. There were no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

20

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

None.

Item 6. Exhibits and Reports on Form 8-K.

Exhibit Number	Description
2.1	Letter of Intent to acquire James Bar Contractors, Inc. dated October 23, 2003 (Incorporated by reference to the exhibits to Form SB-2 filed on June 30, 2004.)
2.2	Agreement and Plan of Merger with ei3 Corporation, dated September 26, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on 9/29/05)
2.3	Amendment No. 1 to Agreement and Plan of Merger with ei3 Corporation, dated November 22, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on November 28, 2005)
2.4	Amendment No. 2 to Agreement and Plan of Merger with ei3 Corporation, dated February 14, 2006 (Incorporated by reference to the exhibits to Form 8-K filed on February 14, 2006.)
3(i).1	Articles of Incorporation dated October 17, 2000 (Incorporated by reference to the exhibits to Form 10-SB filed on February 20, 2002.)
3(i).2	Certificate of Amendment to Articles of Incorporation dated January 10, 2002 (Incorporated by reference to the exhibits to Form 10-SB filed on February 20, 2002.)
3(i).3	Certificate of Amendment to Articles of Incorporation dated July 14, 2003 (Incorporated by reference to the exhibits to Form 10-QSB filed on August 6, 2003.)
3(i).4	Certificate of Amendment of Articles of Incorporation dated June 19, 2004 (Incorporated by reference to the exhibits to Form SB-2 filed June 30, 2004.)
3(ii).1	Bylaws dated October 17, 2002 (Incorporated by reference to the exhibits to Form 10-SB filed on February 20, 2002.)
10.1	Employment Agreement with Stephen W. Carnes dated September 3, 2003 (Incorporated by reference to the exhibits to Form 10-QSB filed on November 14, 2003.)
10.2	Independent Contractor Agreement with Cynthia Wainwright dated October 1, 2003 (Incorporated by reference to the exhibits to Form 10-QSB filed on November 14, 2003.)
10.3	Independent Contractor Agreement with Loren Brown dated October 1, 2003 (Incorporated by reference to the exhibits to Form 10-QSB filed on November 14, 2003.)
10.4	Independent Contractor Agreement with Matt Lettau dated October 1, 2003 (Incorporated by reference to the exhibits to Form 10-QSB filed on November 14, 2003.)
10.5	Consulting Agreement with Mark Broersma dated August 27, 2003 (Incorporated by reference to the exhibits to Form 10-QSB filed on November 14, 2003.)
10.6	Consulting Agreement with Mike Barr dated August 27, 2003 (Incorporated by reference to the exhibits to Form 10-QSB filed on November 14, 2003.)
10.7	Consulting Agreement with Florida Catastrophe Corp. dated September 17, 2003 (Incorporated by reference to the exhibits to Form 8-K filed on September 17, 2003)
10.8	Engagement Retainer Letter with Stoecklein Law Group dated January 21, 2004 (Incorporated by reference to the exhibits to Form 10-KSB filed on March 30, 2004.)
10.9	Letter Agreement with Source Capital Group, Inc. dated January 21, 2004 (Incorporated by reference to the exhibits to Form 10-KSB filed on March 30, 2004.)
10.10	Consulting Agreement with Michael Manion dated February 5, 2004 (Incorporated by reference to the exhibits to Form 10-KSB filed on March 30, 2004.)
10.11	Consulting Agreement with Mark Broersma dated April 29, 2004 (Incorporated by reference to the exhibits to Form 10-QSB filed on May 17, 2004.)

21

10.12	Consulting Agreement with Mike Barr dated April 29, 2004 (Incorporated by reference to the exhibits to Form 10-QSB filed on May 17, 2004.)
10.13	Consulting Agreement with VBg Design dated April 29, 2004 (Incorporated by reference to the exhibits to Form 10-QSB filed on May 17, 2004.)
10.14	Standby Equity Distribution Agreement with Cornell Capital Partners, LP dated April 14, 2004 (Incorporated by reference to the exhibits to Form S-2 filed on June 30, 2004.)
10.15	Registration Rights Agreement with Cornell Capital Parners, LP dated April 14, 2004 (Incorporated by reference to the exhibits to Form S-2 filed on June 30, 2004.)
10.16	Escrow Agreement with Cornell Capital Partners, LP dated April 14, 2004 (Incorporated by reference to the exhibits to Form S-2 filed on June 30, 2004.)
10.17	Placement Agent Agreement with Cornell Capital Partners, LP and Newbridge Securities Corporation dated April 14, 2004 (Incorporated by reference to the exhibits to Form S-2 filed on June 30, 2004.)
10.18	Securities Purchase Agreement with Cornell Capital Partners, LP dated April 14, 2004 (Incorporated by reference to the exhibits to Form S-2 filed on June 30, 2004.)
10.19	Secured Convertible Debenture dated April 14, 2004 (Incorporated by reference to the exhibits to Form S-2 filed on June 30, 2004.)
10.20	Investor Registration Rights Agreement with Cornell Capital Partners, LP dated April 14, 2004 (Incorporated by reference to the exhibits to Form S-2 filed on June 30, 2004.)
10.21	Security Agreement with Cornell Capital Partners, LP dated April 14, 2004 (Incorporated by reference to the exhibits to Form S-2 filed on June 30, 2004.)
10.22	Warrant Agreement dated April 14, 2004 (Incorporated by reference to the exhibits to Form S-2 filed on June 30, 2004.)
10.23	Escrow Agreement with Butler Gonzalez, LLP dated April 14, 2004 (Incorporated by reference to the exhibits to Form S-2 filed on June 30, 2004.)
10.24	Assumption Agreement with Stephen W. Carnes dated September 26, 2005 (Incorporated by reference to the exhibits to Form 8-K filed on September 29, 2005.)
31*	Certification of Stephen W. Carnes pursuant to Section 302 of the Sarbanes-Oxley Act
32*	Certification of Stephen W. Carnes pursuant to Section 906 of the Sarbanes-Oxley Act

* Filed herewith

Reports on Form 8-K

Form 8-K filed on February 14, 2006; Amended Agreement and Plan of Merger (ei3).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

RENOVO HOLDINGS

(Registrant)

                                                                                                                                     By: /s/ Stephen W. Carnes                         

Stephen W. Carnes, President

                                                                                                                                    (On behalf of the registrant and as

                                                                                                                                     principal accounting officer)

Date: May 22, 2006

22